With the implementation of the seventh Pay Commission and OROP recommendations as well as a potential upturn in rural demand, it is expected that domestic consumption demand will increase and this would boost India’s economic growth going forward.

In view of various initiatives initiated by the Modi government and on the basis of the Budget focus on a few sectors and emerging strength in the Indian economy, companies and sectors that are likely to be the key beneficiaries include banks and financial companies, FMCG, infrastructure, oil and natural gas, auto and IT.

The government has been giving a concerted push to accelerate growth through its various initiatives such as ‘Make in India’, ‘Digital India’, ‘Skilled India’, ‘Housing for all’ and much others and states are competing with each other, which has added to the dynamism of the Indian economy.

In the Union Budget, it could be seen that the government prioritised bolstering domestic demand, particularly rural consumption, without endangering its commitment to fiscal consolidation.

Actually, deteriorating corporate profitability, a depreciating currency and concerns that the reforms momentum has grown slower have badly impacted some of the Indian blue chip companies, especially in the capital goods sector.

The capital goods sector has been reeling under pressure, with the size of the market and the total production stagnating at $41 billion and $33.4 billion in FY 15. Over the past three years, the $41 billion Indian capital goods industry has seen production grow at just 1 per cent CAGR.

In order to increase production of capital goods over next 10 years and increase the share of exports from 27 per cent to 40 per cent of production and reduce the share of imports from 40 per cent to 20 per cent, the government has issued the national capital goods policy 2016.

Some Indian steel companies have started performing better on the operational front but on the financial front, most of them are debt-laden and are on the verge of default. In order to rescue the debt-laden Indian steel companies, the government has decided to impose minimum import price (MIP) on steel products.

In order to illuminate the power sector, the government has launched the Ujwal Discom Assurance Yojana (UDAY) to turn around the highly-indebted state power distribution companies, which have debt of almost Rs 4.3 lakh crore.

The rescue plan UDAY, as per the government, would be implemented through four initiatives - improving operational efficiencies of dicoms, reducing cost of power, reducing interest cost of discoms and enforcing financial discipline on discoms through alignment with state finances.

With the recent weak IIP data (third time in a row) that came in at 1.5 per cent (January 2016) driven by a sharp decline in production of capital goods and consumables and inflation in the comfortable zone, it is expected that the Reserve Bank of India in its April monetary policy review will lower interest rates and if that happens, this would be a significant step from the central bank to push growth in the economy.

It could be seen that a flat industrial output growth rate so far in this financial year is signalling that the growth momentum in the economy has remained vulnerable.

However, going forward India is hopeful of gaining momentum as the government continues to undertake structural reforms, and the continuous decline in oil prices, which has helped the Indian economy shrink the current account deficit (CAD), should provide the much-needed relief to the government on the fiscal front.

(The author is Chairman and MD, SMC Investments and Advisors Ltd. Views and recommendations given in this section are his own and do not represent those of EconomicTimes.com.)

Currently, the Goods and Services Tax (GST) is levied at 12 per cent on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.